Home values rose by over a fifth in 2021, despite a slowing in growth over the latter half of the year.
Corelogic’s monthly Hedonic Home Value Index has revealed that values nationally were 1.0% higher in December, down from a 1.3% rise in November.
The changes varied widely, ranging from a 0.1% fall in Melbourne (the first month-on-month fall in Melbourne housing values since October 2020), to a 2.9% surge in Brisbane.
Brisbane and Adelaide, along with regional Queensland, are the only broad regions where there is no evidence of value growth slowing just yet, with the monthly rate of growth reaching a new high in December.
CoreLogic Research Director Tim Lawless remarked that these regions show less of an affordability challenge relative to the larger capitals, as well as better support for housing demand with Queensland in particular showing strong interstate migration.
“Additionally, we haven’t seen the same level of supply response seen in other regions, with the trend in advertised supply remaining well below average in these markets”, he added.
On the other end of the spectrum, momentum has slowed quite sharply in Melbourne and Sydney dwelling markets, with both cities recording the softest monthly reading since October 2020.
“A surge in freshly advertised listings through December has been a key factor in taking some heat out of the Melbourne and Sydney housing markets, along with some demand headwinds caused by significant affordability constraints and negative interstate migration”, Lawless said.
Regional values have seen some renewed momentum with a monthly rise of 2.2%, the highest in nine months. Regional Queensland was the clear standout across the rest-of-state markets in December, with housing values up 2.4%, however over the year the strongest regional markets have been in New South Wales (29.8%) and Tasmania (29.5%).
The most popular regional markets have seen housing values rise more than 30% over the calendar year, with the Southern Highlands and Shoalhaven recording the highest annual rise in home values at 37.7%, followed by Queensland’s Sunshine Coast at 33.7%.
Nationally, dwelling rents increased by 9.4% over the 2021 calendar year; this is the largest annual increase since the 12 months ending January 2008. Unit rents were up 7.5% over the year compared to the 10.1% lift recorded in house rents.
With national housing values recording an annual rise of 22.1% compared with a 9.4% rise in rents, rental yields have decreased as a natural consequence. Gross rental yields fell to a new record low across Australia, reaching 3.2% in December. The lowest yields, by some margin, remain in Sydney (2.4%) and Melbourne (2.7%), however, with the exception of Perth and Darwin, every capital city is recording record low yields.